It is impossible to track the geoeconomic turbulence inherent to the “birth pangs” of the multipolar world without the insights of Professor Michael Hudson at the University of Missouri, and author of the already seminal The Destiny of Civilization.
In his latest essay, Professor Hudson digs deeper into Germany’s suicidal economic/financial policies; their effect on the already falling euro – and hints at some possibilities for fast integrating Eurasia and the Global South as a whole to try to break the Hegemon’s stranglehold.
That led to a series of email exchanges, especially about the future role of the yuan, where Hudson remarked:
“The Chinese whom I’ve talked to for years and years did not expect the dollar to weaken. They’re not crying about its rise, but they are concerned about flight capital from China as I think after the Party Congress [starting on October 16] there will be a crackdown on the Shanghai free-market advocacy. Pressure for the coming changes has been long building up. The spirit of reform to rein in ‘free markets’ was spreading among students over a decade ago, and they have been rising in the Party hierarchy.”
The de-dollarization or decline of dollar hegemony will put the United States in a slow crash and make everyday Americans poorer. Other countries have to de-dollarize because of American foreign policy, which forces them to create an alternative, said Michael Hudson, professor of economics at the University of Missouri-Kansas City.
“Any country that supported land reform, any country that protected its economy and grew its own food, and any country that did anything the United States didn’t like, they have all the foreign exchange, and all the savings stolen,” Hudson said, adding that “so obviously, this has led countries no longer to keep their savings in the form of U.S. dollars.”
Dollar hegemony is the system where U.S. overseas military spending and other spending deficits result in U.S. dollar savings in foreign countries. Then, foreign central banks recycle their reserves in dollars in the form of purchasing U.S. treasuries. Dollar hegemony enabled Americans to have high living standards and to become rich even though the U.S. is de-industrialized.
Economist Michael Hudson has published a new, third edition of his book Super Imperialism that updates his analysis for the 21st century, discussing the new cold war on China and Russia and the ongoing transition from a US dollar-dominated financialized system to a “multipolar de-dollarized economy.”
The Grayzone’s Max Blumenthal and Ben Norton spoke with Hudson about the book and how the strategy of US economic hegemony has evolved since World War One.